Reasoning in Sommerer Reaffirmed by FCA

The FCA upheld the reasoning that subsection 75(2) of the Income Tax Act applies only to a settler or contributor and not where there is a fair market value disposition into the trust.

The FCA stated that future arguments on the basis that the decision in Canada v. Sommerer, 2012 FCA 207, is “manifestly wrong” for failure to consider the whole context of subsection 75(2) will not succeed at the FCA as there is no basis to make such a finding (Miller v. Canada (Attorney General)2002 FCA 370 at para. 10.).

Every year I make this primer, an Introduction to Tax Policy Theory, available to my tax policy students (and otherwise send it whenever I'm asked for an overview look at tax policy basics), so I decided to post it on SSRN. It is not a published piece but may be some day. Here is the description:Taxation […]